It depends on how hard you want your final product, and what kind of bag...vinyl or canvas?

Is it an el cheapo brand, or a good one like Everlast?

I have bought several Century vinyl bags (empty) and put a piece of 4x4" wood in the center (put about 4-6" of rags in the bottom of the bag first), then pack CLEAN rags around the post until full. I finsd bags and bags of rags for free at the Goodwill stores. Anything works, but key here is to make sure they are clean (no nasty smelling things in a bag please) Make sure you take all buttons/zippers off the rags as they will wear a hole in the bag eventually as you use it.

As you use the bag, the rags will pack down and it get harder. You will periodically have to add more rags. If the bag gets to hard for your needs, you can upen the bag, take everything out, fluff up the rags and refill it again.

I haven't tried this, but thought it sounded like a good idea. Put your 4-6" of rags in first, then the 4x4 post, then put maybe 1'2-1" of foam padding inside so that it is in contact with the vinyl/canvas, then fill the empty space between the foam and the 4x4 with rags. Might give a nice "natural" feel to the bag.

A water filled bag is the way to go but with what you have old clothes and rags are perfect as described by Tall above.

What ever you do NOT make the bag progressively "harder" like the old tough guys in the karate schools advocate. You do NOT want to toughen your hands (read "break your wrists") by hitting some sand filled bag.

Try to make the bag have some give like the human body.

If you have a hard bag, hit with shoes on your feet and OPEN HANDS and soft parts like hammerfist.